SMART Moves to a New Forum: Massachusetts Department of Public Utilities to Consider a SMART Tariff

by Foley Hoag LLP - Environmental Law
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Stakeholders have been following the development of “SMART” as a successor to the SREC program in Massachusetts for more than a year.  (See our previous posts on the development process herehere, and here.)  As it stands, SMART reflects a determined effort by the Department of Energy Resources (“DOER”) to craft a program that balances multiple interests and sets a sustainable path for solar development in Massachusetts.  The result of that effort, as we’ve noted before, is complicated.

DOER finalized its SMART regulations in August after making some significant changes to the emergency version it filed in June.  (Among other changes, DOER raised the ceiling price for the competitive procurement that will set compensation rates, modified aspects of the procurement process, clarified some siting issues, and changed the way in which the value of “adders” – increased compensation based on location, off-taker, or facility characteristics – will decline over time.)

Despite their complexity, DOER’s regulations do not fully implement the SMART program.  While DOER’s regulations fastidiously set the levels of compensation for which various configurations of solar generation will be eligible (once an initial procurement sets a baseline rate from which other rates will be calculated), they leave the details of how that compensation will occur to the Department of Public Utilities (the “DPU”), which needs to approve a tariff to implement the program.

The action now moves to the DPU, where the Massachusetts electric distribution companies filed a proposed SMART tariff on September 12.  Many important aspects of the program will be hashed out in that proceeding.  In particular, the proceeding will determine how the SMART mechanism for transferring bill credits outside of net metering (referred to as an “Alternative On-bill Credit”) will function, an element of the program that may prove critical if net metering caps bar future projects from net metering.

Staying in DOER’s court: how to manage the transition from SRECs to SMART.  The Tariff proceeding at the DPU is likely to extend into the first half of 2018.  As we discussed back in March, DOER has guidelines in place that provide for reduced SREC factors for units based on size and the date a unit is authorized to interconnect.  Currently, SREC factors are set to decline for units over 25 kW DC that are not mechanically complete or authorized to interconnect as of March 31, 2018.

The DPU docketed the SMART tariff proceeding as D.P.U. 17-140 and put out a notice on October 3.  A public hearing will be held on Tuesday, October 24, and the Department is accepting written comments until that date.  The deadline for parties to intervene and participate in the evidentiary phase of the proceeding is October 19.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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